Monday, 25 June 2012

How to lower productivity and employment

BRUSSELS — For most Europeans, almost nothing is more prized than their four to six weeks of guaranteed annual vacation leave. But it was not clear just how sacrosanct that time off was until Thursday, when Europe’s highest court ruled that workers who happened to get sick on vacation were legally entitled to take another [paid] vacation.

If you want to raise the costs of employing people this looks like a good way of doing it. Such a ruling doesn't give much of an incentive to an employer to want to employ anyone and if he does employ someone they could be a way from work for even more weeks that he thought. Not having workers actually at work doesn't improve productivity.

The Times article goes on to make the point,

With much of Europe mired in recession, governments struggling to reduce budget deficits and officials trying to combat high unemployment, the ruling is a reminder of just how hard it is to shake up long-established and legally protected labor practices that make it hard to put more people to work and revive sinking economies.